Justia Insurance Law Opinion Summaries

The case concerns an automobile accident in Prince George’s County, Maryland, involving George Bowens and a driver named Lisa Daniels, who was at fault. Bowens sustained injuries and held a $50,000 underinsured motorist (UIM) policy with State Farm. Daniels’ insurance had a $30,000 liability limit, which was offered to Bowens as a settlement for his injuries. Following established statutory procedures, Bowens notified State Farm of this offer, State Farm consented and waived subrogation rights, and Bowens accepted the $30,000. Bowens then sought to recover the remaining $20,000 available under his UIM policy from State Farm, which denied the claim.Bowens filed a breach of contract action in the District Court for Prince George’s County, seeking $20,000. State Farm moved to dismiss, arguing that the District Court lacked subject matter jurisdiction because Bowens would have to prove total damages of $50,000—exceeding the court’s $30,000 jurisdictional cap. The District Court agreed and dismissed the case. Bowens appealed to the Circuit Court for Prince George’s County, which affirmed the dismissal, reasoning that the District Court would need to find damages over $30,000 and thus could not grant relief.The Supreme Court of Maryland reviewed the case and held that the District Court’s jurisdiction is determined by the amount the plaintiff seeks from the defendant in the pending action, not by the total underlying damages or prior settlements received from the tortfeasor’s insurer. Since Bowens’ claim against State Farm was for $20,000, the District Court had jurisdiction. The Supreme Court of Maryland reversed the judgment of the circuit court and ordered the case remanded to the District Court for further proceedings. View "Bowens v. State Farm Mut. Auto. Ins." on Justia Law

After a car accident in Prince George’s County, Maryland, George Bowens, who was injured by the clear negligence of another driver, sought to recover compensation for his injuries. The at-fault driver had $30,000 in liability insurance, which was offered to Bowens in settlement. Bowens, however, had a $50,000 underinsured motorist (UIM) policy with his own insurer, State Farm. After accepting the $30,000 from the at-fault driver’s insurer (with State Farm’s consent and waiver of subrogation rights), Bowens sought the remaining $20,000 from State Farm under his UIM policy, claiming breach of contract when State Farm denied the claim.Bowens filed his action in the District Court of Maryland, which has jurisdiction over contract claims not exceeding $30,000. State Farm moved to dismiss, arguing that to recover the $20,000, Bowens would have to prove total damages of $50,000—an amount above the District Court’s jurisdictional cap. The District Court granted the motion to dismiss for lack of subject matter jurisdiction, and the Circuit Court for Prince George’s County affirmed, reasoning that the court would need to find Bowens’ damages exceeded $30,000, thus exceeding the District Court's authority.The Supreme Court of Maryland reviewed the case and reversed the lower courts. It held that, for purposes of determining the District Court’s jurisdiction under § 4-401(1) of the Courts and Judicial Proceedings Article, the relevant amount is the “debt or damages claimed” in the pleadings—that is, the net recovery sought from the defendant in the action—not the plaintiff’s total damages. Because Bowens sought only $20,000 from State Farm, the District Court had jurisdiction to hear the case. The Supreme Court of Maryland remanded the case for further proceedings consistent with this opinion. View "Bowens v. State Farm Mutual Automobile Insurance Co." on Justia Law

The case involves a Florida-based title insurer that suffered significant financial setbacks, prompting a series of business restructurings and asset transfers. In 2009, the company entered a joint venture with another title insurance group, forming a new entity to handle certain business functions. Over subsequent years, the original company retained substantial assets and continued operations, but further financial decline led to a 2015 agreement in which it transferred assets and liabilities to its business partner, in exchange for the assumption of its policy liabilities. The Florida insurance regulator scrutinized and ultimately approved the transaction after requiring additional commitments from the acquiring party.The United States Bankruptcy Court for the Middle District of Florida later oversaw the company’s Chapter 11 proceedings. The appointed Creditor Trustee brought an adversary proceeding against the acquiring parties and related entities, alleging that the asset transfer constituted a fraudulent transfer under federal bankruptcy law and Florida statutes, and sought to impose successor liability and alter ego claims. The bankruptcy court held a bench trial, excluding portions of the Trustee’s expert valuation as unreliable, and found that the company had received reasonably equivalent value in the transaction. The court also rejected the successor liability and alter ego theories, finding insufficient evidence of continuity of ownership, improper purpose, or harm to creditors.The United States District Court for the Middle District of Florida affirmed the bankruptcy court’s rulings. On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the record and affirmed the district court’s order. The Eleventh Circuit held that the bankruptcy court did not err in excluding the Trustee’s expert, that the asset transfer was for reasonably equivalent value and not fraudulent, and that the successor liability and alter ego claims failed for lack of evidence and legal sufficiency. View "Stermer v. Old Republic National Title Insurance Company" on Justia Law

Several insurance companies initiated a federal lawsuit against a licensed acupuncturist, three professional service corporations under his control, and two unlicensed individuals. The insurers sought a declaration that one of the corporations was not entitled to no-fault insurance reimbursement for services rendered, alleging the corporation engaged in a scheme to pay unlicensed individuals for patient referrals. The payments allegedly violated New York’s professional conduct rules but did not involve the transfer of control over the corporation to unlicensed persons.The United States District Court for the Eastern District of New York found that the acupuncturist and his corporations had engaged in an unlawful fee-splitting and kickback scheme, violating New York law. The court ruled that this professional misconduct rendered the corporation ineligible for no-fault reimbursement under the relevant Department of Financial Services (DFS) regulation and granted summary judgment for the insurers. On appeal, the United States Court of Appeals for the Second Circuit agreed that the referral fees were paid but found it unclear whether this type of professional misconduct made the provider ineligible for reimbursement under the regulation. It certified to the New York Court of Appeals the question of whether such misconduct, absent ceding control to unlicensed persons, permits denial of no-fault benefits.The New York Court of Appeals held that the DFS regulation does not authorize insurers to deny no-fault reimbursement based solely on a provider’s alleged professional misconduct, such as paying for patient referrals, unless that misconduct amounts to a failure to meet a foundational licensing requirement—specifically, surrendering control of the professional practice to unlicensed individuals. The court deferred to DFS’s longstanding interpretation that only licensing violations resulting in loss of eligibility to practice, as determined by regulators, justify denial of reimbursement. The court answered the certified question in the negative. View "Government Employees Ins. Co. v Mayzenberg" on Justia Law

Cheriese Johnson began experiencing a range of symptoms, including coughing and pain in her hands and feet, prior to her employment in July 2016 with The William Carter Company. She purchased a long-term disability insurance policy from Reliance Standard that became effective in October 2016. During the three months before her coverage began, Johnson sought medical care for various symptoms and received several diagnoses, but not scleroderma. In early 2017, after her policy was active, she was diagnosed with scleroderma—a rare autoimmune disease—following a lung biopsy. Johnson then filed a claim for long-term disability benefits, which Reliance Standard denied, arguing her disability was caused by a preexisting condition for which she had received treatment during the policy’s lookback period.After her claim was denied and her appeal was unsuccessful, Johnson sued Reliance Standard in the United States District Court for the Northern District of Georgia under the Employee Retirement Income Security Act (ERISA). She moved for judgment on the administrative record, while Reliance Standard sought summary judgment. The district court granted summary judgment to Reliance Standard, finding its decision to deny benefits was correct under the terms of the policy.On appeal, the United States Court of Appeals for the Eleventh Circuit reversed the district court’s judgment. Applying ERISA’s interpretive framework and reviewing the plan administrator’s decision de novo, the Eleventh Circuit held that Reliance Standard’s interpretation of the policy was both incorrect and unreasonable. The court concluded that Johnson had not received medical treatment “for” scleroderma during the lookback period because neither she nor her doctors suspected or intended to treat that specific condition at that time. The court found that Reliance Standard’s interpretation was arbitrary and capricious, and remanded for further proceedings consistent with its opinion. View "Johnson v. Reliance Standard Life Insurance Company" on Justia Law

A 2018 data breach at Barracuda Networks exposed protected health information of patients of Zoll Services LLC, a subsidiary of Zoll Medical Corporation. Zoll had contracted with Fusion LLC for data security services, and Fusion in turn relied on Barracuda’s technology. The agreements between these companies included certain liability and indemnification provisions, as well as a right for Barracuda to audit Fusion’s customer contracts. After the breach, Zoll settled a class action brought by its customers whose data was compromised.Following these events, Zoll initiated arbitration against Fusion and filed suit against Barracuda in the U.S. District Court for the District of Massachusetts. Fusion intervened and asserted additional claims against Barracuda. The district court dismissed most claims but allowed Zoll’s equitable indemnification claim and Fusion’s breach of contract and breach of the covenant of good faith and fair dealing claims to proceed. After arbitration and settlements, Axis Insurance Company, as assignee and subrogee of Zoll and Fusion, was substituted as plaintiff. Barracuda moved for summary judgment on the remaining claims, which the district court granted.On appeal, the United States Court of Appeals for the First Circuit reviewed the district court’s summary judgment rulings de novo. The appellate court held that Axis failed to present evidence of a relationship between Zoll and Barracuda that would support derivative or vicarious liability necessary for equitable indemnification under Massachusetts law. The court found that Fusion did not meet a condition precedent in its contract with Barracuda, and Barracuda had not waived or was estopped from asserting that condition. Further, Axis could not show that Barracuda breached the covenant of good faith and fair dealing, as no relevant contractual right existed. The First Circuit affirmed the district court’s grant of summary judgment in favor of Barracuda on all claims. View "Axis Insurance Company v. Barracuda Networks, Inc." on Justia Law

A provider of air ambulance services transported a patient insured by a health maintenance organization, but the provider was not part of the insurer’s network. After the transport, the provider and insurer could not agree on the payment amount. The dispute was submitted to the Independent Dispute Resolution (IDR) process established by the federal No Surprises Act, which requires each party to submit a payment offer and supporting rationale to an arbitrator. The arbitrator, a certified IDR entity, selected the insurer’s lower payment offer. The provider alleged that the insurer had misrepresented its “Qualifying Payment Amount” (QPA) by submitting a lower QPA to the arbitrator than it had previously provided to the provider, and claimed this constituted fraud.The United States District Court for the Middle District of Florida dismissed the provider’s complaint, finding that judicial review of IDR awards is limited to the grounds set forth in the Federal Arbitration Act (FAA), and that the provider’s allegations did not meet the heightened pleading requirements for fraud. The court also dismissed the arbitrator from the case with prejudice, holding that the No Surprises Act does not create a cause of action against IDR entities.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s dismissal. The Eleventh Circuit held that the No Surprises Act incorporates the FAA’s limited grounds for vacating arbitration awards and that the provider failed to adequately plead fraud or undue means under those standards. The court also found that the arbitrator did not exceed its authority and that it was not necessary to name the arbitrator as a defendant to challenge the award. The judgment of the district court was affirmed in full. View "REACH Air Medical Services LLC v. Kaiser Foundation Health Plan Inc." on Justia Law

A resident of Madison County, Mississippi, received medical treatment at a hospital in Hinds County and later filed a claim with her health insurer, a foreign corporation doing business in the state. The insurer partially paid the claim but later, through its third-party administrator, asserted the hospital was out of network before eventually admitting it was in network. Despite repeated efforts by the insured to resolve the dispute, the insurer failed to pay the remaining balance or provide an explanation, ultimately stating the claim was untimely. The insured then sued the insurer and the administrator in Hinds County, seeking damages for breach of contract and related claims.The Circuit Court of Hinds County denied the insurer’s motion to dismiss or transfer venue to Madison County. Only the insurer sought and was granted an interlocutory appeal from this order. The administrator did not join the appeal.The Supreme Court of Mississippi reviewed the case, applying de novo review to the interpretation of the venue statute and abuse of discretion to the trial court’s venue ruling. The Court held that, under Mississippi Code Section 11-11-3(1)(a)(i), venue is proper where a substantial act or omission by the defendant caused the injury for which the plaintiff seeks redress. The Court found that the medical treatment in Hinds County was not a substantial event caused by the insurer that resulted in the alleged injury; rather, the alleged injury arose from the insurer’s acts or omissions related to the insurance contract, which were not tied to Hinds County. The Court overruled prior precedent to the extent it conflicted with this interpretation and concluded that venue was proper in Madison County. The judgment of the Hinds County Circuit Court was reversed and the case remanded for further proceedings in Madison County. View "National Health Insurance Company v. Lever" on Justia Law

Lauren Woods was injured in a car accident involving an underinsured motorist and sought benefits from her insurer, Progressive American Insurance Company, under her policy’s underinsured motorist provision. Progressive declined to pay the full policy limit. Woods then sued Progressive for breach of contract and statutory bad faith under Florida law, alleging that Progressive failed to settle her claim in good faith. After serving civil remedy notices, Woods’s case was removed to federal court based on diversity jurisdiction.The United States District Court for the Southern District of Florida first held a jury trial on Woods’s underinsured motorist claim, resulting in a verdict and final judgment in her favor that exceeded the policy limit. Woods then proceeded with her statutory bad faith claim before the same court. Prior to the bad faith trial, the parties stipulated to certain facts, including the existence and amount of the prior verdict and judgment. They also agreed that the magistrate judge would determine damages, and the jury would decide only liability. At the start of the bad faith trial, Woods limited her theory to Progressive’s conduct before the underinsured motorist trial, and the court excluded evidence and instructions regarding the prior verdict and excess judgment. The jury found for Progressive on the bad faith claim, and the court denied Woods’s motion for a new trial.On appeal, the United States Court of Appeals for the Eleventh Circuit held that the district court did not abuse its discretion in excluding the prior verdict and excess judgment from the bad faith trial. The court found that, given Woods’s stipulation limiting the scope of her claim and the parties’ agreement that damages would be determined by the judge, the excluded evidence was irrelevant to the jury’s determination of liability. The Eleventh Circuit affirmed the district court’s judgment in favor of Progressive. View "Woods v. Progressive American Insurance Company" on Justia Law

Bliv, Inc. owned a commercial building insured by Charter Oak Fire Insurance Company against hail damage, but not against damage caused by wear and tear. After a storm on July 9, 2021, Bliv claimed that water intrusion had damaged both the exterior and interior of the building, asserting that hail was the cause. Charter Oak’s expert, Isaac Gaetz, inspected the property and found hail damage to vents and air conditioner fins, but no damage to the roof’s membrane. Gaetz concluded that the water intrusion was due to long-term wear and tear, not hail. Bliv disputed this and retained its own expert, Brian Johnson, who opined that hail caused the loss, relying on reports and satellite images rather than direct testing or inspection of the interior.The United States District Court for the Eastern District of Missouri reviewed the case. Charter Oak moved to exclude Johnson’s expert opinion, arguing it lacked sufficient factual support and was not based on reliable methods. The district court found Johnson qualified but excluded his opinion due to deficiencies in his investigation, such as failing to review key reports, not inspecting the interior, and not conducting independent testing. Without Johnson’s opinion, Bliv could not rebut Charter Oak’s causation evidence, and the district court granted summary judgment in favor of Charter Oak.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s exclusion of Johnson’s opinion under the abuse of discretion standard. The appellate court found that, despite some inconsistencies in the district court’s reasoning, there was a sufficient basis for exclusion because Johnson’s opinion relied on incomplete information and failed to address critical evidence. The Eighth Circuit held that the district court did not abuse its discretion and affirmed the summary judgment in favor of Charter Oak. View "Bliv, Inc. v. The Charter Oak Fire Insurance Company" on Justia Law